Identifying “Educational and Support Services” as Third-Party Arrangements

The national regulator for VET released a fact sheet in September 2016 that provides guidance to RTOs about their responsibilities in managing third-party arrangements (click). Generally, this fact sheet is quite helpful and informative for RTO’s. There is, however, information in the fact sheet that does create uncertainty in regard to defining “educational and support services” as a third-party arrangement.

Just by way of a brief introduction, the Standards for Registered Training Organisations (RTOs) 2015 define a third-party as “any party that provides services on behalf of the RTO but does not include a contract of employment between an RTO and its employee”. The fact sheet then defines services as “training, assessment, related educational and support services and/or any activities related to the recruitment of prospective learners”. Now, the aspect relating to training and assessment and recruit services is quite straightforward. Defining “related educational and support services” is more complex.

The national regulator provides a list of education support services that “may” constitute a third-party arrangement. These include the following:

pre-enrolment materials

study support and study skills programs

language, literacy and numeracy (LLN) programs or referrals to these programs

equipment, resources and/or programs to increase access for learners with disabilities and other learners

learning resource centres

flexible scheduling and delivery of training and assessment

learning materials in alternative formats, for example, in large print

learning and assessment programs contextualised to the workplace

any other services that the RTO considers necessary to support learners to achieve competency

Before we progress, just consider the above list in the context of your RTO and ask yourself are there any support services that you engage that could fall into the above service descriptions?

In early 2018, we started to see a trend in client enquiries in respect of meeting their obligations to notify the national regulator of third-party arrangements as required under the standards and clause 8.3. This trend included clients seeking advice about determining what education support services constitute a third-party arrangement. A number of requests that clients made to the national regulator often resulted in just been referred back to the fact sheet rather than actually providing any guidance which was the purpose of the request. In June 2018, Newbery Consulting wrote to the national regulator and requested more detailed guidance on what it considered to be a third-party arrangement under the banner of “education support services”. Our experience is that the national regulator will only respond effectively to very specific questions and so a number of scenario situations relating to education support services were put to the national regulator to determine if they would consider these to be third-party arrangements.

Of course, the implication of these arrangements being considered as third-party arrangements is considerable. This means that each arrangement needs to be supported by a formal written agreement which imposes requirements on the third party to cooperate with the national regulator and to submit to monitoring arrangements by the RTO. It also requires that the RTO to notify the specifics of each third-party arrangement to the national regulator before the service is commenced and when the arrangement is concluded. In short, it imposes a considerable layer of bureaucracy and administration onto the RTO and third-party service providers for what most would consider to be service arrangements that are fundamental to most RTO operations.

The following is an edited version of the questions put to the national regulator and their response with some additional commentary:

Pre-enrolment materials

Question: A client outsource to a service provider the provision of pre-enrolment material (learning material or otherwise) to learners prior to their attendance at the course. Do you consider this to be a third-party arrangement?

Response: It depends on the specific nature of the engagement with learners. If, for example, a print-on-demand company was simply positing out learning materials to learners, this would not constitute a third-party arrangement. If the activity involved distributing material to a prospective learner to the extent this would be considered part of the recruitment process, then yes, this would constitute a third-party arrangement.

Commentary: The national regulator has specifically linked the supply of pre-enrolment material to learners (as a support service) to a recruitment services. The distinction here is if the supply of the pre-enrolment material was conducted by the third-party to collect the enrolment details of the learner and supply these as an enrolment to the RTO, this would constitute a third-party arrangement. If the third-party was simply distributing pre-enrolment material as a form of marketing or pre-course preparation not connected to any “recruitment” process then this should not be considered as a third-party arrangement. That’s pretty clear. Great!

Study support and study skills programs

Question: A client delivers VET in school’s programs where teachers at the school collaborate with teachers from the provider to provide study support and study skills to learners. Do you consider this to be a third-party arrangement?

Response: Yes, this is clearly a third party arrangement as described in the Standards for RTOs.

Commentary: This advice potentially has considerable implications for RTO’s. If you remove the context of the question regarding “VET in schools” it potentially means that any third party collaborating with an RTO (to provide learning or study support) could be defined as a third-party arrangement. But, the fact sheet specifically says that “a workplace supervisor who contributes to evidence collection or training” is not included in the definition of a third-party.

The main distinction between these two situations seems to be the competency of the teachers collaborating with the RTO. Because the RTO is relying on the services being provided by the school (by qualified teachers), then it is considered to be outsourcing some of its responsibility as the RTO to fully support the learner. This reliance tips the situation into a third-party arrangement and the regulator wants to know about it. The line between the VET in schools scenario and some enterprise/RTO collaborations can be very fine. A scenario where the enterprise based “workplace trainer” who is qualified in training and assessment and is working with the RTO to deliver and assess in the workplace could also fall into the same classification as the above VET in schools program. Many resource and civil construction courses are delivered exactly like this.

Language, literacy and numeracy (LLN) programs or referrals to these programs

Question: A client engages a local community college who have educational specialists that specialise in the delivery of language literacy and numeracy programs, to provide support to learners identified during the learner’s enrolment as requiring support. Do you consider this to be a third-party arrangement?

Response: Yes, this is clearly a third-party arrangement as described in the Standards for RTOs.

Commentary: This advice is very clear. This means that any arrangement that an RTO has to refer a learner to a specialist provider in regard to improving their foundation skills or language, literacy and numeracy skills should be considered to be third-party arrangement, notified to the national regulator and supported by a third party written agreement. This situation would apply to the majority of RTO’s. Most of these types of specialist services are supplied by public RTO’s who technically will now need to enter into a third-party arrangement with a private provider and be subject to monitoring by the private provider. You can see the implications of this in regard to the introduction of significant bureaucracy and administration for services that are simply fundamental to the good operation of an RTO and the support of learners. It potentially puts barriers in the way of this type of support occurring not to mention that many of the service providers in this space are unlikely to agree to entering into a formal written third-party agreement. I think the national regulator will need to reconsider its definition, however, based on the very clear advice it has provided, all RTO’s should be reviewing their arrangements with LLN support service providers to establish a written third-party agreement and notify the national regulator.

Equipment, resources and/or programs to increase access for learners with disabilities and other learners

Because this category of support service is so broad, a number of questions were put to the national regulator to identify the scope of how this category of support services should be interpreted.

Question: A client leases the clubhouse of the local rugby club where there are two commercial coffee machines to deliver training in serving espresso coffee. Do you consider this to be a third-party arrangement?

Response: No, this would not be a third-party arrangement.

Question: A client purchases commercial learning and assessment resources from a business to support the delivery of a national training product. Do you consider this to be a third-party arrangement?

Response: No, this would not be a third-party arrangement.

Question: A client enters into an agreement with a local quarry to access plant equipment and utilise the quarry environment and material for the conduct of civil construction training. Do you consider this to be a third-party arrangement?

Response: No, this would not be a third-party arrangement.

Commentary: The national regulator was also requested to provide an example of what it would consider to be a third-party arrangement in this category but did not respond to this request. So, it appears that if the RTO accesses facilities or equipment of another business or organisation to support the delivery of training and assessment then this should not be considered as a third-party arrangement. It also seems that where an RTO accesses (through purchase or some other type of arrangement) learning and assessment material from a third-party that this should also not be considered as a third-party arrangement. Lucky, can you imagine implications of that! The difficulty that I have with this category is not so much about the aspect relating to disability equipment and resources, it is the inclusion of “other learners” which is troubling. It would be great if the national regulator could provide some examples of situations that it considers would be included in this category in relation to other learners.

Learning resource centres

Question: A client enters into an agreement with a local library for its learners to utilise study pods and access computers and textbooks to support their learning. Do you consider this to be a third-party arrangement?

Response: No, this would not be a third-party arrangement.

Commentary: The national regulator was also requested to provide an example of what it would consider to be a third-party arrangement in this category but did not respond to this request. If the above example relating to the agreement with the library is not considered to be a third-party service, then it is difficult to identify what would be considered as a third-party service under this category. In the public domain, a learning resource centre is defined as a “facility staffed by specialist containing information sources”. Sounds like a library to me! Anyway, it is good to have that clarification, but we are no wiser what a “Learning Resouce Centre” is.

Flexible scheduling and delivery of training and assessment

Question: I really have no idea what was intended by this item in the list. Can you please provide an example of what this may constitute as a third-party arrangement?

Commentary: The national regulator did not respond to this question. I really cannot think of a valid example or situation where a third party may provide flexible scheduling and delivery of training and assessment in the context of education support services. It is telling that the national regulator itself cannot define what an education support service under this category might include.

Learning materials in alternative formats, for example, in large print

Question: A client engages an interpreter service to convert learning text to another language or as another example engages an AUSLAN support person to support the candidate with a hearing disability. Do you consider this to be a third-party arrangement?

Response: This is two different scenarios. A person engaged in translating learning materials is not a third-party arrangement. A person providing AUSLAN support to a learner would be a third-party arrangement.

Commentary: Unfortunately, I feel more confused about this category than before I asked the question. So, if we organise a service provider to supply learning materials in an alternative format such as large print for those with a sight impairment, this is considered a third-party arrangement. Conversely, if we engage a business to convert text to an alternative language but do not change the size of the font, then this should not be considered as a third-party arrangement. Seriously, what a contradiction!

But, the one piece of clarity to come out of this response is if you engage an AUSLAN support person or any service to support a learner with disability, then this should be considered as a third-party arrangement. I personally think this is crazy. It technically means that a minimum of 30 days prior to engaging this service you need to establish a written agreement that includes all the necessary clauses and notify the national regulator. Within 30 days of the agreement of this service coming to an end, you also need to notify the regulator. Just crazy stuff. Bureaucracy gone mad!

It brings to mind a situation a client of ours who delivers forklift training had recently where they had a learner make an enquiry to do a forklift course in Sydney. The learner had a hearing impairment and their guardian notified the RTO about this during the pre-enrolment engagement. The client made an enquiry with SafeWork to confirm their requirements and the RTO organised for an AUSLAN interpreter to attend the course to support the learner. It ended in a great outcome. The learner acquired the skills and knowledge, got the licence, SafeWork were happy and the RTO can quite rightly be very proud of this. The RTO’s ability to quickly adapt the service to the requirements of the learner in consultation with the licensing authority was outstanding.

Now consider this situation in the context of the advice provided by the regulator. Just crazy! Don’t they see that this type of interpretation of the standards actually puts barriers in the way of proper support services being provided particularly to those with disabilities.

Learning and assessment programs contextualised to the workplace

Question: A client engages a consultant or learning resource developer to engage with a client enterprise to customise the learning materials and assessments to the enterprise requirements. Do you consider this to be a third-party arrangement?

Response: No, this would not be a third-party arrangement.

Commentary: The national regulator was also asked to identify an example of what it would consider to be a third-party arrangement under this category and it did not provide a response to this request. It is hard to know what is intended by this string of words. Are they suggesting that if an RTO delivers learning and assessment which is customised to the workplace that this should be considered to be a third-party arrangement? I know, the suggestion of this is crazy, but that’s what it says, “learning and assessment programs contextualised to the workplace”. I thought, maybe it means where an RTO might engage another party to assist in this contextualisation, but clearly this is not the case either. If they are referring to where another party delivers customised training, then this would clearly come under the category relating to training and assessment services being delivered on behalf of the RTO and not as an “education and support services”. So, unfortunately, I am no clearer about this definition. Happy to receive any other advice or opinions.

Any other services that the RTO considers necessary to support learners to achieve competency.

Question: Seriously, this last one is amazing. If there wasn’t enough uncertainty in the previous items in the list, then this seriously opens the interpretation up to anything that the auditor considers in their mind might constitute a third-party arrangement. How are RTOs meant to have certainty or reliability in their regulation? Please feel free to provide an example of what “any other services” might include.

Response: The flexible nature of VET in Australia and the wide variety of delivery models used by RTOs means that regulatory requirements must be sufficiently flexible to avoid restricting access to VET. This means that prescriptive requirements cannot be stipulated, which wold be the only way of achieving the ‘certainty’ you request.

Commentary: Look; to be honest, I am still trying to digest this response. Basically, they seem to be saying that they want to leave all options on the table to interpret situations however they please, so they can regulate over RTOs’ without any limits, or something like that.

I suppose that we can conclude that “any other service” includes anything where the RTO engages a third-party service not previously excluded by the information provided above or advice contained within the fact sheet. All clear? Ok, good, lets move on! 🙂

Conclusion

Getting a clear definition from the national regulator can be challenging. I appreciate that they did respond and know from my own experience how difficult their job is. What we can conclude from regulator’s response is:

The following education and support services should not be considered as third-party arrangements:

engaging a service provider to supply pre-enrolment material or information which is not linked to any recruitment process

using facilities, equipment or resources of another business or organisation to support the delivery of training and assessment

utilising the equipment and resources of a local library or equivalent facility in the support of training and assessment

The following education and support services should be considered as third-party arrangements:

collaborating with an organisation in the delivery of learning and study support where the third party provides qualified teachers or trainers to support the course delivery

engaging the services of a specialist provider of language literacy and numeracy support services

utilising a disability support service in support of learning and assessment such as an AUSLAN interpreter

So, if you find that you are in a third-party arrangement (in accordance with clause 2.3), you need to establish a written third-party agreement in regard to these services and (in accordance with clause 2.4) you need to impose monitoring arrangements on these service providers to ensure the services they are providing are consistent with your obligations under the standards. You also need to notify the national regulator (in accordance with clause 8.3) a minimum of 30 days prior to these services being commenced and within 30 days of the agreement coming to an (Third Party Service Arrangement notification form).

The national regulator also indicated in their response to us that the fact sheet relating to third-party arrangements would be reviewed. We hope that some of the issues and questions raised in this request for clarification will be further clarified. You never know, hopefully we might even get some “prescriptive requirements” or maybe not. 🙂

We at Newbery Consulting feel very strongly about ensuring the quality and compliance of nationally recognised training. There is no doubt that the delivery of training and assessment and recruitment services by a third-party can pose a risk to this quality and compliance. There should continue to be tight regulation of these arrangements. We need to be careful in our sector that we do not put unnecessary barriers in the way of appropriate support services being provided to learners. We also should be careful that we do not stifle the valuable cooperative arrangements that exist between RTOs’ and other organisations such as enterprises and schools who are simply seeking nationally recognised training and wanting to collaborate with the RTO in the delivery of this. It is important that whilst providing strong regulation, we do not impose lateral consequences on providers which has the effect of hindering their support of learners and limiting innovative training with enterprises and schools.

We hope this has been helpful in providing some answers about identifying education and support services as third-party arrangements.